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Strategy Builder

Lesson 6 of 12
Duration 3:09
Level Beginner
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Quickly design and preview multi-legged options combinations orders using IBKR Desktop. Evaluate potential performance profile and view Greeks over the lifetime of the trade.

Study Notes:

Investors may use the Strategy Builder to easily create multi-leg options strategies from within the Option chain. To get started, the user may open the Option Chains from the Quote page.  

Locate the Strategy Builder toggle to the right of the option chain selectors. Activate the Strategy Builder by clicking on the toggle.

When activated, the right-side Price Panel with order buttons is replaced by the Strategy Builder interface. 

To add legs to your strategy, click the bid (for a sell) or ask (for a buy) at a specific strike price. By default, call options are on the left side of the strike, and put options are on the right. Each leg is added to the Strategy Builder. 

User may remove any leg using the minus sign to the right of the leg in the Strategy Builder.

If you create a known strategy, for example a Bull Call or a Calendar spread, the strategy is labeled for convenience.

User may adjust the strategy by changing leg from buy to sell and vice versa. The ratio can be adjusted by typing into the Quantity field. Easily add a stock leg to your strategy using the Add Stock Leg feature.

The combination summary and quote is displayed below, indicating the number of legs, the strategy (if known) and the bid/ midpoint and ask prices. The Order Ticket states the price and shows whether the cost is a credit or debit. 

Note the Performance Profile and profit chart below the quote. Depending upon the nature of the combination and number of legs involved, the data displays max loss, max profit and associated breakeven prices. The Performance Profile chart visually displays the trades potential characteristics over a designated price movement for the underlying asset. Use the Max move dropdown to change the data reading displayed on the plot. By default the Profile displays P&L, which is shown here in blue font. The user may alter the profile display through a selection of Greek values by clicking on the label. Note also that the date selector enables the user to view P&L or Greek values on any date through expiration. Scroll down the page to see additional data and news related to the underlying asset.

Once the user has finished adding legs to your order, they click Order Ticket to set up and submit the multi-leg strategy. Here the user may modify any necessary order parameters like order side, quantity, order type etc, before submitting the order.

Resources

IBKR Desktop User Guide

Join The Conversation

If you have a general question, it may already be covered in our FAQs. If you have an account-specific question or concern, please reach out to Client Services.

10 thoughts on “Strategy Builder”

  • masoud

    How can I change the chain strikes from high (top) to low (bottom)?

    • Interactive Brokers

      Thank you for your question, masoud. Please click the column header “Strike” once and it should sort the strikes from high to low. You can click it again to sort it from low to high again. We hope this helps!

  • Jonathan

    Hi, how can I see the margin requirement and probability of profit before open a position?

    And for futures, how can I choose the month of the contract when I use the search bar?

    Thank you.

  • Jerry

    Strangely, I can toggle the toggle the strikes from high-low-high on TWS options chain but not the desktop.
    additionally, could someone confirm volume profile indicator is only available on Desktop chart and not TWS advance chart?

    • Interactive Brokers

      Hello Jerry, the Volume indicator is also available on TWS Advanced Charts. We hope this helps!

  • Anonymous

    Basically, when I sell OTM call & put on same day expiration, with an objective of pocketing both the premiums what should I do in IBKR mobile app?
    1) buy short strangle strategy or
    2) sell short strangle strategy

    NOTE: Following is easy to understand, but involves two orders.
    3) sell the put & sell the call legs

    • Interactive Brokers

      Hello, thank you for reaching out. Please note that IBKR does not provide investment advice.

  • Nitin

    How to place a sell vertical put for credit .

    • Interactive Brokers

      Hello Nitin, thank you for reaching out. To sell a put vertical spread in TWS:
      1. Open the Strategy Builder in TWS.
      2. Select “Calls and Puts” view.
      3. Click on the Bid price of the put option you want for the long leg to add it to the strategy.
      4. Click on the Ask price of the put option with a lower strike that you want for the short leg.
      5. Define the order parameters like quantity and price in the Order Entry section.
      6. The debit or credit amount will be shown. Since this is a put credit spread, you should see a credit.
      7. Review the order and transmit it to sell the put vertical spread.
      Please review this tutorial on IBKR Campus for additional information:
      https://ibkrcampus.com/trading-lessons/vertical-credit-spread/

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Disclosure: Interactive Brokers

The analysis in this material is provided for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IBKR to buy, sell or hold such investments. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Interactive Brokers, its affiliates, or its employees.

Disclosure: Options Trading

Options involve risk and are not suitable for all investors. Multiple leg strategies, including spreads, will incur multiple commission charges. For more information read the "Characteristics and Risks of Standardized Options" also known as the options disclosure document (ODD) or visit ibkr.com/occ

Disclosure: Options (with multiple legs)

Options involve risk and are not suitable for all investors. For information on the uses and risks of options, you can obtain a copy of the Options Clearing Corporation risk disclosure document titled Characteristics and Risks of Standardized Options by clicking the link below. Multiple leg strategies, including spreads, will incur multiple transaction costs. "Characteristics and Risks of Standardized Options"

Disclosure: Multiple Leg Strategies

Multiple leg strategies, including spreads and straddles, will incur multiple commission charges.

Disclosure: Displaying Symbols on Video

Any stock, options or futures symbols displayed are for illustrative purposes only and are not intended to portray recommendations.

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